Indian OTAs Strike Back with Service Fee Model

India’s online travel agents (OTAs) intend to charge their clients a Service Fee on sales in light of the looming zero commission policy to be adopted by domestic and international carriers starting October 1st. Big players in the Indian OTA industry like Arzoo.com, Cleartrip.com, Travelocity.com, and Yatra.com consider the implementation of a service fee model as the only feasible choice for them to gain from air bookings after October since the bulk of their revenue is from air bookings.

The structure for the implementation of the Service Fee model is still being considered, says Amalendu Purandare, Head-India Operations of Arzoo.com, as the backend technology for the implementing the Service Fee model will require time and investment. In the case of Travelocity.com, the service fee is an international model operational in all countries with zero commission for agents like the US, Australia, and in Europe, says the international portal’s India managing director, Himanshu Singh. But implementation of the model in India will take place once the rest of the market does the same.

Cleartrip.com and Yatra.com are still considering other options aside from the Service Fee model but both are likely to implement it post October since air bookings cover a huge share of their companies revenue.

Source: Travelbizmonitor at www.travelbizmonitor.com